Shale producer Diamondback misses profit estimate, cuts capex forecast

Diamondback Energy's second-quarter profits missed analyst expectations due to lower crude oil costs. The shale producer also lowered its full-year capital expenditure forecast.

In extended trading, shares of the company dropped 2.7% on Monday. Since the last close, they are down by nearly 11%.

Diamondback has cut its capital budget for the current year by 200 million dollars, bringing it down to $3.4-$3.6 billion. This was due to volatility and uncertainty.

The company said that there is no compelling reason for them to increase their activity in this year.

Diamondback said in May that a combination between global economic uncertainty, and the rising OPEC+ oil supply had brought U.S. production of oil to a critical point. The company had warned it would reduce its activity if oil prices continued to fall.

According to LSEG data, the Midland, Texas based company reported an adjusted profit per share of $2.67 for the three-month period ended June 30 compared to analysts' average estimates of $2.82.

Brent crude was 20% lower on average in the third quarter compared to a year ago, due to U.S. Tariffs, their impact on global economic growth, OPEC+ production gains, and geopolitical tensions.

After Israel attacked Iran's nuclear sites, the price of oil briefly reached $80 per barrel. However, it dropped to $67 at the end.

Diamondback reported that its average realized crude oil price for the third quarter, excluding hedges and other costs, was $63.23 a barrel, a decline of about 20% compared to last year.

After acquiring private rival Endeavor Energy Resources for $26 billion, production almost doubled to 919 879 barrels equivalent per day.

On the back of increased gas demand, the company has raised its production forecast for full-year to between 890,000. and 910,000. boepd.

(source: Reuters)